Tesla Nears Preliminary Agreement For Indonesia Electric Car Plant

Tesla Inc is nearing a preliminary agreement to establish a factory in Indonesia, as Elon Musk's electric vehicle pioneer seeks to capitalise on the Southeast Asian nation's reserves of key battery metals. According to the sources, the plant could produce up to one million cars per year, in line with Tesla's goal of having all of its factories worldwide reach that capacity.

A deal has not been signed, and the agreement could still fall through, according to the people, who asked not to be identified because the talks are private. Indonesian Investment Minister Bahlil Lahadalia stated that talks with Tesla are being led by the coordinating ministry for maritime affairs and investment. A ministry representative did not immediately respond to requests for comment.

Indonesia has long courted Tesla, signing a US$5 billion (RM21.85 billion) nickel supply agreement with the automaker last year.

President Joko Widodo told Bloomberg News in August that Indonesia wants Tesla to make electric cars, not just batteries, and that the country is willing to take the time to persuade Musk that Indonesia is more than just a supplier of critical resources.

Tesla factory in Indonesia would be the company's third outside of its home market of the United States, joining facilities in Shanghai and a plant near Berlin. While Indonesia provides a gateway to Southeast Asia's 675 million consumers, it's a difficult market for global automakers because affordable cars, typically priced under US$20,000 account for the majority of sales.